Social Exchange/Rational Choice Theories
Social exchange/rational choice theories focus on the process by which actors-individuals. groups. corporations. or societies, for example-settle on one The foundation of this approach is the doctrine of utilitarianism-a belief that the purpose of all action should be to bring about the greatest happiness to the greatest number of people. An example of this belief is found in the assertion of early economist Adam Smith (1976/1776) that individuals who are allowed to make economic decisions free from the external constraints of government will make the best decisions not only for themselves but also for the entire society. Social exchange theories are based on the assumption that self-interest is the basic motivating factor in people's interactions. According to this approach, people learn to adjust their behavior so that they receive rewards from others rather than negative responses or punishment (Homans, 1974).When people do not give and take in a manner that is deemed appropriate by other group members. conflict often ensues. and relationships among people may be destabilized (Gouldner, 1960). Consider this example of give and take: A good friend offers you a gift, but you decide to refuse it What factors contribute to your decision? Self Tests such as keeping the friendship or acquiring a possession of some worth-might dictate that you accept the gift. However. other factors may also be involved. What if you do not like the gift or do not want to feel obligated to reciprocate in some manner? The offer of the gift forces you to assess your self-interest in t..e situation: What will you gain or lose by accepting or rejecting the gift? Ultimately. your decision may cause solidarity or conflict; it may stabilize or destabilize your relationship with the other person. Now, if we think of a similar exchange involving words rather than tangible objects, a similar process occurs. In work settings, for example, an exchange might involve conferring a reward (prestige) on someone in return for a valuable contribution (such as expert advie \ (see Ho ans, 1958. 1974; and Blau, 1964. i975).
Based on self interest, a person may accept or reject the statements or implicit assumptions of another person. In fact, people often compete with one another as they seek to maximize their rewards and minimize their punishments (Blau, 1964. 1975). People do not always gain reciprocal benefits from exchanges with others, particularly in situations where one person in the exchange occupies a 'dominant power position over another person (Emerson. 1962).
Rational choice theorists have analyzed situations in which the actors have differing amounts of power. Ratione! choice theories are based on the assumption that social life can be explained by using models of rational individual action (Outhwaite and Bottomore, 1994). Accordingly. rational choice theorists are more concerned with explaining social outcomes than in predicting what an individual will de in a particular situation (Hechter and Kanazawa, 1997). Rational choice theory assumes that actors are purposeful or intentional in their decisions; however, many theorists acknowledge that not all actions are necessarily rational and that people do not always act rationally (Hechter and Kanazawa, 1997). . What are the key eleme rational choice theories? According to the James S. Coleman (1990). actors and resOURCES an important factors in rational choice. Actors mal include individuals. groups. corporations.. and societies. Resources comprise the things over which actors have control and in which they have some interest. Major constraints on actors' choices are the scarcity of resources and structural restrictions (Marsden, 1983). Actors with fewer resources are less likely to pursue the most highly valued goal or end. They may decide to go for the next most attractive goal or end out of fear that they will lose the chance to acquire even the next-most-attractive end if they initially pursue an unrealistic goal or expectation. For example. suppose that Zoe, who has very few economic resources, wants to attend an Ivy League university (her most-highly-valued goal). AIthough her first-choice school sends her a leuer of acceptance, it does not offer her a scholarship. Meanwhile, a large state university (her next-most-attractive goal) admits her and offers her a full four-year scholarship.
When Zoe weighs her options-attending by taking out large student loans and getting a job or attending "State U· on a full scholarship that gives her time to study-she may select her next-most-attractive goal, whereas individuals with greater economic resources would probably attend their first-choice institution. In addition to availability of resources, a second major constraint on actors' choices is social institutions (Friedman and Hechter, 1988). Institutional constraints such as rules, laws, ordinances, corporate policies, and religious doctrines limit actors' available choices. Using a rational choice approach, the sociologist Michael Hechter (1987) studied what happens when people "do their own thing- in an organization. Among other findings, Hechter concluded that organizations with large numbers of employees hire others (including security guards, managers. and inspectors) to control people's behavior so that they will not unduly pursue their propensity to maximize their own gain or pleasure, particularly at the expense of the organization.